Holding Companies in Andorra

Companies Features Advantages

HOLDING companies

A holding company is a commercial company whose objective is to own or manage all or most of the shares of other companies, in order to obtain total or partial control over those companies. It is a type of business integration where a company seeks profitability, but not necessarily the integration of activities.

A holding company is a business figure that is usually created to benefit from some tax incentives, as is the case of the holding companies in Andorra. These have a particular taxation because they are subject to taxes different from those imposed on normal companies.

Holdings in Andorra

CHARACTERISTICS of Holding companies

There are different types of holding companies: financial, family, state, common capital, among others.

The holding companies in Andorra can also have 2 main legal entities: the public limited company (PLC or SA in Spanish) and the limited liability company (Ltd or SL in Spanish). The first requires a minimum capital stock of € 60,000, divided into numbered shares and registered in the company’s registry. While to establish the second requires a contribution of social capital of at least € 3,000, divided into non-negotiable shares, and having at least 10 shareholders.

Among the advantages that a holding company can have, besides the low taxes in Andorran holdings, we can find:

  • Optimization of expenses. Especially those that originate among the companies that make up the business group.
  • Improvement in the efficiency of accounting.
  • Increase of the company’s participation in the market.
  • It allows the integrated companies to have stability in their activities by reducing the economic risk.
  • It guarantees a compensation to the participants if an unexpected economic loss occurs.

With this business figure there are also disadvantages, such as internal communication problems, caused by the flow of information. As well as loss of identity and corporate image. That is why we recommend our advice when creating a society in Andorra.

ADVANTAGES of creating a Holding company in Andorra

Advantatges of Holding companies in Andorra

These companies have the advantage that they are fiscally beneficial, both for the company itself and for its shareholders. Dividends resulting from foreign companies that are related to a holding, for an Andorran who participates in it, are not taxed by Personal Income Tax (IRPF in Spanish). The profits that the holding companies in Andorra may receive from their association with any foreign company are also exempt from tax.

This type of company is a trend nowadays, as they increase and promote entrepreneurship in the country. Andorra has also the tendency in the recent years of the establishment of companies of this and other types. This is thanks to the financial, economic and fiscal advantages offered by the Principality, which are optimal for entrepreneurs looking for new opportunities to develop their company.

And on the other hand, social advantages that make Andorra one of the countries with the best quality of life in Europe.

The cultural diversity found in the country, the citizen and social safety, and also the education, health and infrastructure systems, make Andorra a very likely place to establish a company and even a long-term residence.

If you are interested in creating a Holding company in Andorra, do not hesitate to contact Andorra Advisors, where we offer you both accounting advice and legal services for your company.

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Frequent questions

It is a company that acquires most of the shares of other companies to achieve full or partial control.
Holding companies can appear in two legal forms, the limited company and the limited company. The first requires a minimum share capital of € 60,000, while the second requires € 3,000.
  • Dividends generated by foreign companies are not subject to personal income tax for Andorrans participating in it.
  • The profits that an Andorran holding company receives from a foreign company will be exempt from the benefits taxes.
  • Cost optimization
  • More efficient accounting
  • Greater stability in its activities thanks to the decrease in risk.
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04-11-2019